Delta Airlines 2012 Annual Report Download - page 96

During the March 2012 quarter, we moved from a cumulative loss position over the previous three years to a cumulative income position for the
first time since we established a full valuation allowance. We have concluded as of December 31, 2012 that the valuation allowance was still needed
on our net deferred tax assets based upon the weight of the factors described above, especially considering the history of losses. We continue to
evaluate our cumulative income position and income trend as well as our future projections of sustained profitability and whether this profitability
trend constitutes sufficient positive evidence to support a reversal of our valuation allowance (in full or in part).
The following table shows the balance of our valuation allowance and the associated activity:
Income Tax Allocation
We consider all income sources, including other comprehensive income, in determining the amount of tax benefit allocated to continuing
operations (the "Income Tax Allocation"). During 2009, as a result of the Income Tax Allocation, we recorded a non-cash deferred income tax
expense of $321 million on other comprehensive income as a result of hedge gains on fuel derivatives and an offsetting non-cash income tax benefit
of $321 million . This deferred income tax expense will remain in AOCI until all amounts in AOCI that relate to fuel derivatives which are
designated as accounting hedges are recognized in the Consolidated Statement of Operations. We will reclassify to earnings all amounts relating to
our fuel derivative contracts in AOCI on the original contract settlement dates. As a result, a non-cash income tax expense of $321 million will be
recognized upon the settlement of the fuel derivative contracts designated as accounting hedges.
89
(in millions) 2012 2011 2010
Valuation allowance at beginning of period
$
10,705
$
9,632
$
9,897
Income tax provision
(432
)
(351
)
(257
)
Other comprehensive income tax benefit
690
1,241
6
Other
—
183
(14
)
Valuation allowance at end of period
(1)
$
10,963
$
10,705
$
9,632
(1)
At December 31, 2012 , 2011 and 2010 , $3.1 billion , $2.5 billion and $1.2 billion
of these balances were recorded in AOCI on our Consolidated Balance Sheets, respectively.